Can Orbital turn satellite data into cash?

Founder and CEO James Crawford (left) collaborates with senior software developer Nitin Panjwani at the Orbital Insight office in Mountain View, Calif. on Friday, March 13, 2015. The start-up uses satellite imagery to, according to its website, detail "global and national trends through advanced image processing and data science." less

Founder and CEO James Crawford (left) collaborates with senior software developer Nitin Panjwani at the Orbital Insight office in Mountain View, Calif. on Friday, March 13, 2015. The start-up uses satellite ... more

Photo: Paul Chinn, The Chronicle

Image 2 of 5

Founder and CEO James Crawford analyzes a satellite image of the Olympic Stadium in Nanjing, China at the Orbital Insight office in Mountain View, Calif. on Friday, March 13, 2015. The start-up uses satellite imagery to, according to its website, detail "global and national trends through advanced image processing and data science." less

Founder and CEO James Crawford analyzes a satellite image of the Olympic Stadium in Nanjing, China at the Orbital Insight office in Mountain View, Calif. on Friday, March 13, 2015. The start-up uses satellite ... more

Photo: Paul Chinn, The Chronicle

Image 3 of 5

Founder and CEO James Crawford (left) collaborates with senior software developer Nitin Panjwani at the Orbital Insight office in Mountain View, Calif. on Friday, March 13, 2015. The start-up uses satellite imagery to, according to its website, detail "global and national trends through advanced image processing and data science." less

Founder and CEO James Crawford (left) collaborates with senior software developer Nitin Panjwani at the Orbital Insight office in Mountain View, Calif. on Friday, March 13, 2015. The start-up uses satellite ... more

Photo: Paul Chinn, The Chronicle

Image 4 of 5

Founder and CEO James Crawford works at the Orbital Insight office in Mountain View, Calif. on Friday, March 13, 2015. The start-up uses satellite imagery to, according to its website, detail "global and national trends through advanced image processing and data science." less

Founder and CEO James Crawford works at the Orbital Insight office in Mountain View, Calif. on Friday, March 13, 2015. The start-up uses satellite imagery to, according to its website, detail "global and ... more

Photo: Paul Chinn, The Chronicle

Image 5 of 5

Founder and CEO James Crawford (left) works at the Orbital Insight office in Mountain View, Calif. on Friday, March 13, 2015. The start-up uses satellite imagery to, according to its website, detail "global and national trends through advanced image processing and data science." less

Founder and CEO James Crawford (left) works at the Orbital Insight office in Mountain View, Calif. on Friday, March 13, 2015. The start-up uses satellite imagery to, according to its website, detail "global and ... more

Photo: Paul Chinn, The Chronicle

Can Orbital turn satellite data into cash?

1 / 5

Back to Gallery

Space, the so-called final frontier, turns out to be a great place to collect data.

Orbital Insight, a Mountain View startup, builds software that can track trends in images collected by hundreds of satellites — predicting retail upswings based on the number of cars in a store’s parking lot, for example, or global crude oil reserves by volume of tanks.

On Monday, the company announced $8.7 million in series A venture capital funding, including investment from Sequoia Capital, Bloomberg Beta, Google Ventures, Citizen.vc and Lux Capital.

Company founder James Crawford called Orbital the first serious attempt to build a big, automated data pipeline from satellite images, yielding information that could be of interest to investors, businesses, nonprofits and a long list of others.

“This is a macroscope,” Crawford said. “Biologists invented a microscope that helped them see cells they could never see before. This is a tool for seeing things that are big.”

One example: How might an investor tell which competitor — Home Depot or Lowe’s — draws more shoppers? How many shoppers visit Ross in the lead-up to the holidays?

By counting the cars in the parking lot, or rather, programming a computer to count the cars for you.

“We processed a million images of parking lots, and we counted 700 million cars in those images,” Crawford said. “We’re tracking 60 different publicly traded retailers ... We can see Walmart sales go up and down. We can look at day-of-week variations.”

Digging deeper

While profit-and-loss information is always available for public companies, some of the minutiae that might interest investors is missing: Are customers shopping during the week or on weekends? During the day or after work?

“If you look at the SEC reports, that stuff’s not there,” he said.

Crawford has a background in harvesting information — he was engineering director of Google’s effort to put millions of books online and make them searchable. Prior to that, he worked in robotics at NASA’s Ames Research Center.

For some long-established satellite imagery companies, “most of the revenue comes from the government, and that’s not considered a growth market,” Crawford said. He likened satellite imagery to GPS technology — a system that was built (and is still maintained by) the federal government, but now has wider applications.

“Commercial space has come of age in the last couple years,” Crawford said, citing Google’s 2014 acquisition of Skybox Imaging, a startup that provides high-resolution satellite imagery and analytics. In January, Planet Labs, a company that builds satellites, raised $95 million.

With investors eager to back commercial space ventures, that pace is likely to increase. As of last year, there were about 1,100 active satellites orbiting the Earth — both government and privately owned, according to the Associated Press. In the next five years, more than 500 small satellites are expected to be launched, according to estimates by Euroconsult, a consulting firm focused on space markets.

“The hardware side of the business is changing unrecognizably from these small numbers of satellites, primarily military applications, to hundreds of satellites that are commercial and are vastly cheaper,” Crawford said.

Crawford wouldn’t disclose Orbital’s clients — but said many are investors who like to stay under the radar.

The rise in the number of commercial satellites is especially interesting to some investors because it allows them to see information that changes their frame of reference, said Denise Valentine, a senior analyst at Aite Group, a research and advisory firm.

“You can count bodies, you can count cars, you can count the traffic flow down a highway or in an urban area, which has applications within the investment world,” Valentine said. “When it’s done in a noninvasive way, it’s kind of a low-touch but very informative technique.”

Crawford has a long list of his software’s applications across sectors: For one, how can investors learn about China’s building boom when the country isn’t forthcoming with information?

The shadows know

Look at shadows, he says. Orbital is already working on software that can estimate the height of a building by the size of its shadow — information that’s key to investors because, when the market slows down, “You can bet that they’re not going to put out press releases.”

In agriculture, analyzing satellite imagery makes it easier to see when regional corn crops are parched with drought.

“We’ve shown that we can predict U.S. corn yield earlier in the season and more accurately than the U.S. Department of Agriculture,” Crawford said.

Orbital could also use satellite imagery to measure deforestation, tracking countries that chop down rain forest acreage, and estimating which villages are most impoverished, based on the number of thatched roofs.

Despite their potential, satellites aren’t without limitations: it takes them roughly two weeks to orbit the Earth, meaning it takes about 14 satellites to get daily images. Furthermore, the resolution of satellite images is regulated to protect privacy.

Both are issues that drones — which fly lower and can take clearer, crisper photos — could potentially fix.

“As long as we know the latitude and longitude of the image, it goes into our software pipeline exactly the same,” Crawford said.

But deploying drones for commercial use is a dicey affair.

“The (Federal Aviation Administration) has said that in order to use a drone for commercial purposes, you need to obtain an exemption from the agency, which comes with a lot of conditions, including the need for a pilot’s license,” said Brendan Schulman, special counsel at Kramer Levin Naftalis and Frankel, and head of the law firm’s civilian drones practice.

A key role

Even if restrictions on commercial drones don’t loosen, Orbital’s mixture of analytics and intelligence has the power to be transformative, said James Cham, a partner at Bloomberg Beta.

“Ultimately, I think we will live in this world where even the average general manager of an organization will be able to use satellite imagery to make decisions about day-to-day operations,” he said.